Enter your purchase price, land value, and the month you placed the property in service. You get the depreciable basis, a prorated first-year deduction, and a full year-by-year schedule. Everything runs in your browser, nothing is saved or sent anywhere.
Rental property depreciation is your cost basis minus the land value, divided by 27.5 years for a residential rental or 39 years for a commercial building, straight line under MACRS. Buy a duplex for $350,000 with $70,000 of that sitting on the land and your depreciable basis is $280,000, so the full-year deduction is $10,182, or 3.636 percent of basis, about $848 a month. Year one is prorated by the IRS mid-month convention, so an April start gives $7,213 instead of the full amount. At a 24 percent marginal rate, one full year of that deduction is roughly $2,444 of tax you do not pay, and a later sale may expose some of that depreciation to a federal rate of up to 25 percent if the sale has gain. The SealedFolio rental property depreciation calculator on this page runs the full schedule and the potential tax figure for free, with no signup, entirely in your browser, and the SealedFolio desktop app keeps the same schedule current for every property you own.
This potential tax figure assumes sale gain at least equals depreciation. Actual unrecaptured Section 1250 gain is limited to sale gain and can be zero. The figure applies your marginal rate, capped at 25 percent, and excludes state tax. Confirm your sale gain, basis, and tax rate with your tax professional. SealedFolio is not tax advice.
| Year | Depreciation | Cumulative | Remaining basis |
|---|
The first and last years are partial because real property uses the mid-month convention, so a 27.5-year schedule spans 28 or 29 calendar years.
SealedFolio tracks depreciation and Schedule E automatically across your whole portfolio. See how it works. More tools: all calculators.
The SealedFolio rental property depreciation calculator follows the same five steps the IRS uses, so you can check every number by hand. Depreciation lets you deduct the cost of a rental building a little at a time, spread across the years the IRS says it lasts, even when the property is going up in value. Residential rentals use a 27.5-year recovery period and commercial buildings use 39, both on the straight-line method under MACRS. Here is what the calculator is doing behind the scenes.
A worked example: you buy a duplex for $350,000 and the assessor's split puts $70,000 on the land. Your building basis is $280,000. On a 27.5-year schedule that is about $10,182 a year, which works out to 3.636 percent of the building basis per full year. If it had been a commercial building on 39 years, the same basis would give roughly $7,180 a year, about 2.564 percent.
For the full narrative on what depreciation is and why it matters to your return, read how rental property depreciation works. Depreciation is one of the biggest line items on a landlord's list of deductions, and it flows straight onto your return.
Every input in the SealedFolio rental property depreciation calculator maps to a number you already have in your closing papers or county records. Here is what to enter and where to find it.
Rental property depreciation applies to the building only, so the land allocation is the single input in the SealedFolio calculator that moves your deduction the most, and it is the one most owners guess at. Four ways to set it, roughly in order of how well they hold up if anyone asks:
What does not stand on its own: an insurance replacement-cost figure, which ignores land entirely, and a flat 80/20 rule of thumb dropped on a lot where the dirt is obviously worth more, like an infill city parcel. Change the land value in the SealedFolio calculator above and watch the annual number move. Shifting that $350,000 duplex from a 20 percent land allocation to 30 percent takes the yearly deduction from $10,182 down to $8,909, about $305 a year in tax at a 24 percent rate. For the background on basis and allocation, see how rental property depreciation works.
The depreciation rate for a residential rental property is 3.636 percent of the depreciable basis per full year, which is 100 divided by 27.5. Commercial property runs 2.564 percent, 100 divided by 39. The first year is lower because of the mid-month convention, and the exact figure depends on the month you placed the property in service. These are the published IRS percentages, from Publication 527 Table 2-2d for residential (the same figures appear as Table A-6 in Publication 946) and Publication 946 Table A-7a for nonresidential, and the SealedFolio calculator above applies the same mid-month math, so a January residential start lands on 3.485 percent either way.
| Month placed in service | Year 1 rate, residential 27.5-yr | Year 1 rate, commercial 39-yr |
|---|---|---|
| January | 3.485% | 2.461% |
| February | 3.182% | 2.247% |
| March | 2.879% | 2.033% |
| April | 2.576% | 1.819% |
| May | 2.273% | 1.605% |
| June | 1.970% | 1.391% |
| July | 1.667% | 1.177% |
| August | 1.364% | 0.963% |
| September | 1.061% | 0.749% |
| October | 0.758% | 0.535% |
| November | 0.455% | 0.321% |
| December | 0.152% | 0.107% |
Every year after the first uses the flat rate, 3.636 percent on a 27.5-year schedule (the IRS table alternates 3.636 and 3.637 so the rounding lands evenly) and 2.564 percent on 39, until a final partial year picks up whatever basis is left. Multiply the percentage by your depreciable basis, not by the purchase price, which is the mistake that inflates a return. On the $280,000 duplex basis, a September start is 1.061 percent, so year one is $2,971, then $10,182 in every full year that follows.
Three worked problems show what the SealedFolio rental property depreciation calculator prints for the questions people search most, and you can type each one into the fields above to check it.
The remaining basis column in the schedule above is the number the last example asks for. It shrinks by each year's deduction until the building is fully written off.
Before the SealedFolio calculator's numbers mean anything, rental property depreciation has to clear four tests that IRS Publication 527 sets out: you own the property, you use it in a business or income-producing activity, it has a determinable useful life, and it is expected to last more than one year. A rental you hold for income clears all four. Your own home does not, until the part you rent out is placed in service.
A rental property does not get a full year of depreciation in the year you buy it, which is why the SealedFolio calculator asks for the month you placed it in service. The IRS treats residential and commercial property as placed in service at the midpoint of the month you actually put it into service, so the first year is prorated. Place a property in service in April and you get 8.5 months of that first year, roughly 71 percent of a full-year deduction. Because the first year is partial, the schedule runs one calendar year past the recovery period: a 27.5-year building is fully written off across 28 or 29 tax years. The calculator above and the schedule table both apply this, which is why the first and last rows are smaller than the ones in between.
Each column in the SealedFolio rental property depreciation schedule above answers a different question. Depreciation is your deduction for that tax year: the first row is prorated by the mid-month convention, the middle rows are the flat full-year amount, and the final row is whatever basis remains. Cumulative is everything claimed so far, and it limits the depreciation portion of a possible gain when you sell. Remaining basis is what is left to deduct, which also feeds your adjusted basis if you sell or do a like-kind exchange. If a row looks small, check whether it is the first or last year before assuming something went wrong.
The SealedFolio calculator uses the straight-line method, the same amount every full year, which is how rental buildings depreciate under the Modified Accelerated Cost Recovery System (MACRS). Most landlords use the General Depreciation System (GDS), which sets the 27.5-year and 39-year periods. The Alternative Depreciation System (ADS) uses longer lives, currently 30 years for residential placed in service after 2017 and 40 for commercial, and is required in specific cases such as certain electing real property businesses or property used mostly outside the United States. The SealedFolio calculator models GDS straight-line, which covers the large majority of rentals.
Not on the shell. The building itself is stuck on 27.5 or 39 years of straight-line depreciation, which is what the SealedFolio calculator above models, but shorter-life pieces inside a property, such as appliances, flooring, cabinetry, and land improvements like fencing or paving, can be split out and depreciated over 5, 7, or 15 years. A cost segregation study is the engineering report that identifies those components, and it can pull a large chunk of deductions into the early years. Some of that reclassified property may also qualify for bonus depreciation, which the One Big Beautiful Bill Act restored to 100% for qualified property acquired after January 19, 2025. Those moves bring deductions forward and can increase the depreciation portion of a later gain. SealedFolio's rental property depreciation guide covers cost segregation and bonus depreciation in more depth. This tool sticks to the straight-line building deduction, which is the largest and most common piece.
A sale can produce unrecaptured Section 1250 gain from depreciation allowed or allowable, even if you never claimed the deduction. The amount is limited to the smaller of that depreciation or the gain on the sale. If you sell without gain, there may be no unrecaptured Section 1250 gain. When present, it is taxed at a federal rate of up to 25 percent. A qualifying 1031 exchange can defer the gain.
The calculator multiplies cumulative depreciation by your marginal rate, capped at 25 percent, to show a potential federal tax amount. That assumes the sale gain is at least as large as the depreciation. On the $280,000 duplex example, ten full years of deductions come to about $101,800, so the potential amount is up to about $25,400 if the sale has enough gain. With a smaller gain, the taxable depreciation portion is smaller; with no gain, it can be zero. For a sale calculation using an actual sale price, see the SealedFolio depreciation recapture tax calculator.
Claiming rental property depreciation is worth it for almost every landlord, and the SealedFolio calculator above shows why in two lines of its results. IRS Publication 527 reduces your basis by depreciation you deducted or could have deducted, so skipping the deduction does not prevent a later sale gain from including a depreciation portion. On the $280,000 duplex basis, ten full years of deductions total about $101,818. At a 24 percent marginal rate that is roughly $24,436 of tax you did not pay along the way. Skip the deduction and you lose those annual savings, while depreciation still reduces your basis. A later sale can have no unrecaptured Section 1250 gain if there is no gain.
Two honest caveats. If your rental shows a loss, the passive activity rules can hold part of it back until a later year or until you sell, so the saving may arrive later than the schedule suggests. And the benefit may be timing: you deduct now, while a later sale with gain may include a depreciation portion taxed at up to 25 percent, unless a qualifying 1031 exchange defers the gain. Timing still counts, because money you keep today can pay down debt or fund the next property.
Five errors account for most of the rental property depreciation numbers that come out wrong, and the SealedFolio calculator above gives land value, property type, and month placed in service their own fields so three of them are hard to commit by accident.
The first-year figure from the SealedFolio rental property depreciation calculator goes on Form 4562 for the year you place the building in service: line 19i for residential rental property and line 19j for nonresidential real property on the 2025 form, which added a new line 19h for 50-year property. Each year's deduction then lands on Schedule E line 18, where the rest of your rental income and expenses live. In later years you generally skip Form 4562 for that building and enter the full-year amount from the schedule straight on line 18.
SealedFolio's Schedule E calculator and SealedFolio's Schedule E guide for 2026 walk through that form line by line. If you have owned a rental for years and never claimed depreciation, you usually cannot just amend old returns, you file Form 3115 to change your accounting method and take the missed deductions as a catch-up in the current year. Because depreciation changes your after-tax return, it is worth checking against your rental ROI and cash flow numbers. The IRS rules behind all of this live in Publication 527, Residential Rental Property and the Form 4562 instructions, the places to check any edge case this page does not cover.
The SealedFolio rental property depreciation calculator models GDS straight-line depreciation with the mid-month convention, and every formula it uses is listed here so you can audit it.
Improvements are treated as if placed in service with the building. A roof added in year six really starts its own 27.5-year schedule that year, which SealedFolio's desktop app tracks per improvement. Sources, checked September 27, 2026 against the 2025 editions: IRS Publication 527 (Table 2-2d), IRS Publication 946 (Tables A-6 and A-7a), the Form 4562 instructions, and the Schedule E instructions, and the Schedule D instructions for the gain limit on unrecaptured Section 1250 gain. For cash flow, cap rate, and exchange math, SealedFolio keeps its other free real estate investment calculators on one page.
The questions landlords ask most about rental property depreciation, answered with the same math the SealedFolio calculator on this page runs.
Subtract the land value from your cost basis to get the depreciable building basis, then divide by the recovery period: 27.5 years for residential rental property or 39 years for commercial. That is the full-year straight-line deduction. The first year is prorated by the mid-month convention based on the month the property was placed in service, so it comes out smaller than a full year. SealedFolio's calculator on this page runs all three steps and prints the schedule.
You write off the building portion of your basis, never the whole purchase price, at 3.636 percent a year for a residential rental and 2.564 percent for commercial. A $280,000 depreciable basis gives $10,182 a year. There is no dollar cap on the deduction itself, but the passive activity loss rules can limit how much rental loss you deduct against other income in the same year, and the unused part carries forward.
Residential rental property depreciates at 3.636 percent of the depreciable basis per full year and commercial at 2.564 percent. The first year uses a lower rate set by the mid-month convention, running from 3.485 percent for a January start down to 0.152 percent for December on a 27.5-year residential schedule, as published in IRS Publication 527 Table 2-2d and Publication 946 Table A-6.
Residential rental property depreciates over 27.5 years and commercial over 39 years under GDS. The Alternative Depreciation System uses longer periods, currently 30 years for residential placed in service after 2017 and 40 for commercial, and applies only in specific situations.
Use your county assessor's ratio of land value to total assessed value and apply that percentage to your cost basis, or use an appraisal or a contract allocation that itemizes site value separately. Only the building portion is depreciable. On a $350,000 duplex with 20 percent allocated to land, the depreciable basis is $280,000.
No. Land does not wear out, so it is not depreciable. Split your cost basis between land and building, often using the ratio from your county assessor's values, and depreciate only the building portion plus qualifying improvements.
An improvement adds value, extends the property's life, or adapts it to a new use, such as a new roof, an addition, or replacing a full HVAC system. Those are added to basis and depreciated. Routine repairs that keep the property working, like fixing a leak or repainting, are usually deducted in full the year you pay them.
Not on the building shell, which is locked to 27.5 or 39 years of straight-line depreciation. A cost segregation study reclassifies shorter-life components such as appliances, flooring, cabinetry, and land improvements into 5, 7, and 15-year buckets that depreciate faster and may qualify for bonus depreciation. Accelerating pulls deductions forward, it does not create extra ones, and it can increase the depreciation portion of a later gain.
Gain from the sale attributable to depreciation allowed or allowable may be taxed as unrecaptured Section 1250 gain at a federal rate of up to 25 percent. The amount cannot exceed the gain on the sale, so a sale with no gain may produce no unrecaptured Section 1250 gain. A qualifying 1031 exchange can defer gain when you reinvest in like-kind property.
Yes for almost every landlord, because the IRS reduces your basis by depreciation allowed or allowable whether you claim it or not. On a $280,000 building basis, ten full years of deductions total about $101,818, worth roughly $24,436 of tax at a 24 percent marginal rate. If a later sale has gain, the depreciation portion may be taxed up to that gain. Skipping the deductions gives up the annual savings without avoiding that basis reduction. SealedFolio's calculator shows the yearly saving and a potential tax amount that assumes enough sale gain.
IRS Publication 527 sets four conditions: you own the property, you use it in a business or income-producing activity, it has a determinable useful life, and it is expected to last more than one year. Land is never depreciable. Depreciation starts when the rental is ready and available to rent. Residential buildings use 27.5-year straight line and commercial buildings 39-year straight line under GDS with the mid-month convention, and the deduction goes on Form 4562 in the year the property is placed in service and on Schedule E line 18 every year.
Divide the full-year deduction by 12. A residential rental with a $280,000 building basis depreciates $10,182 a year on a 27.5-year schedule, which is about $848 a month. Your tax return uses the annual figure, but the monthly number is handy for bookkeeping, and SealedFolio's calculator on this page prints it next to the annual deduction.
Subtract the depreciation claimed from the starting basis. A $150,000 basis on a 30-year straight-line schedule loses $5,000 a year, so after 10 years the adjusted basis is $100,000. On the IRS 27.5-year residential schedule the same $150,000 drops by about $5,455 a year, leaving roughly $95,455 after ten full years. The remaining basis column in SealedFolio's schedule tracks this year by year.
You generally cannot just amend several past returns. The usual fix is filing Form 3115 to change your accounting method and claim the missed depreciation as a catch-up adjustment in the current year. A tax professional normally handles this.
Residential rental property writes off 3.636 percent of the building basis each full year, which is 100 percent divided by 27.5 years. Commercial property writes off about 2.564 percent, divided by 39. On a $280,000 building basis that is about $10,182 a year for a residential rental. This is a tax schedule, not a market prediction, the house can gain value while you deduct it.
The 2 percent rule is a screening shortcut, not a tax rule: monthly rent of at least 2 percent of the purchase price. It says nothing about depreciation, which is driven by your depreciable basis and the 27.5 or 39-year recovery period rather than by rent.
Screen a deal properly with the SealedFolio rental cash flow calculator or cap rate calculator.
It shows depreciation through your chosen holding period and potential federal tax on that amount at your rate, capped at 25 percent. Actual unrecaptured Section 1250 gain cannot exceed gain on the sale. Because this calculator has no sale price, its potential tax figure assumes enough gain and could be zero if you sell without gain.
For the full picture at sale, including what a like-kind exchange defers, pair it with the SealedFolio 1031 exchange calculator.
Yes. SealedFolio maintains depreciation schedules per property and portfolio-wide, for both 27.5-year residential and 39-year commercial, and rolls them into your Schedule E reports. Everything stays on your device.
See how the desktop app handles it in SealedFolio for investors.